Friday, December 10, 2010
Jeter's bonuses mostly for show
We can finally put Derek Jeter's new contract to bed, as Jayson Stark has details of the incentive clauses that might escalate his 2014 salary from $8 million to $17 million:
Jeter is guaranteed salaries of $15 million next year, $16 million in 2012 and $17 million in 2013, with $2 million of that money deferred without interest in each of those seasons. But it's in 2014 when the creative player option kicks in, at a salary that could range between $8 million and $17 million, depending on how Jeter plays in the first three years.
" $4 million if he wins an MVP award in 2012, '13 or '14. " $2 million if he finishes second through sixth in any of those years. " $1.5 million if he wins a Silver Slugger in any of those years. " $500,000 if he wins a Gold Glove in any of those years. " $500,0000 if he wins an LCS MVP award in any of those years. " $500,000 if he wins a World Series MVP award in any of those years. There is no limit to how many times he can earn any of those escalator payouts. However, the most he can get paid in 2014 is $17 million, meaning he can earn no more than $9 million in increases. If the option is picked up for any amount less than $17 million, he can also earn any of those amounts in 2014 -- up to a max of $17 million earned.
In addition, the deal contains a $3 million buyout if the option isn't picked up, which brings the guaranteed portion of the contract to $51 million over three years.
I think it's worth mentioning, at least once more, just how brilliantly the Yankees played this thing.
Remember, Jeter earned $20 million this year. His agent asked for a raise (probably knowing he wouldn't get it, but you have to start somewhere). The Yankees, according to most reports, offered a three-year deal worth $45 million; $15 million per season.
Well, the Yankees have committed to spending $48 million over the next three seasons; $16 million per season, but actually somewhat less because of the deferred money (how much less is impossible to guess until we know the time period of the deferments).
And all those performance incentives? Of that possible extra $9 million Jeter may earn in 2014, he'll be lucky to grab more than $1 million, maybe $2 million. He might enjoy a nice bounce-back next season and finish fifth or sixth the MVP voting. The Gold Glove voters might just keep rubber-stamping that one until Jeter's fitted for an artificial hip. But that $17 million isn't even a fantasy; it's just a bunch of face-saving gobbledygook that nobody who knows anything is taking seriously.
Basically, the Yankees are paying Jeter almost exactly what they wanted to pay him, in the first three years of the deal. In the fourth year, if he still wants to play, they'll pay him $8 million if he wants to play. But one can easily imagine him not wanting to play, if he hasn't been playing well, and instead deploying his $3 million parachute and waving goodbye. If he does want to play, he'll probably have been playing well enough to justify an $8 million salary.
I don't mean to suggest this deal is perfect for the Yankees. A perfect deal would have included some way of accounting for the distinct possibility that Jeter's just not a good enough fielder to play shortstop in 2013, or a good enough hitter to play DH. A lot of things might go wrong in the next three years. But considering the Yankees' need for a shortstop and the myriad pressures to keep Jeter a Yankee Forever, they did about as well here as they could have.